Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Log in

Register

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. You'll receive an email shortly with a link to create a new password. If you have trouble finding this email, please check your spam folder.

A comprehensive study about the Euro and suggestions to meet the uncertain future.The author suggests that Northern Countries should show more humanity and flexibility by making more credit available to the poorer countries. The EU is a very complex, and above all a very diverse, Union. There are many factors at play such as: the attempt by France and also the EU Commission ( civil servants ) to gain control over the EU, the EU is managed by 27 leaders up from the 6 founders, the Brexit, 7 members are paying for the EU in which they are a democratic minority, corruption in East European countries ( in the past also Greece ), several countries that do not obey agreements, France who has too many labor strikes, Italy who increased price level by 38 %.Both France and Germany failed to restructure their economy. A completely intransperant bureaucracy in Brussels. I do not see how transforming such an EU into a transfer Union, and handing out credit, could result in increased productivity. Also the well known economist Hans Werner Sinn disagrees with you.Recommended reading: Fulfilling the Promise of Europe, M. Rutte, PM of the Netherlands, Government of the Netherlands ; The deep state of Europe, Basil Coronakis, 2016.

Slightly unfair. The key national growth figure is per capita growth. Not absolute growth rates. Europe’s population has been growing at far (far) lower rates than the US, recent migration aside. Europe has its share of problems as does the US and the UK (which does not see itself as European these days). At the moment I have more faith in the EU to tackle the problems it faces than I do the US. That may not be saying much about the US, whose pillars of pax-Americana are on the decline, and now even undermined. An “own goal” of sorts in football (soccer) terms. But any way one looks at the overall situation (and underlying systemic dynamics) we are all in for a very rough ride economically in coming years ...

Migrant influx into Europe is unfortunately- for the working class European causing social turmoil, affecting education/employment training, family stability, female safety and equality-causing real DIS-integration for Europeans on the real streets. The European elites for the most part can ignore, and do not experience much of the disintegration on the streets, unless someone in their immediate family is perhaps abducted, or is experiencing some aspect of existence outside of the normal elite roped inter-social gatherings, and gated confines/communities/properties that can be accessed by private aircraft.

The issue of the Euro compounds the international financialization effects on the same working class European citizens.

Intervention by Saudi Arabia on some level may contribute to alleviating some of the effects on the European working classes and the Muslim working classes.

There needs to be reasonable and humane relocation of disrupted populations especially in Europe. Now, who is going to support any level of that type of work effort? And, of course, the Euro cannot, alone, as an exchange medium be blamed for any failures really-on-the-streets in Europe or the MidEast.

Who can buy: "The euro was supposed to bring shared prosperity, which would enhance solidarity and advance the goal of European integration. In fact, it has done just the opposite, slowing growth and sowing discord." ? That rhetoric is just another easy cheap shot falling directly to the ground, with no real ammunition of validity.

Destruction of governmental policies, and local tax revenues that are focused for and invested into local communities and individual nations are what has slowed growth and sown discord in European nations, and other nations. The focus on Corporate profit disbursements to a few ( especially non-European citizens) rather than re-disbursing "profits/inflationary funds/exchange media- meaning any of the prior currencies" from market activities back into community infrastructure has slowed growth and sown discord in Europe.

There is no real income base to support the European working class citizenry, especially with an influx of other working class non-citizens demanding accommodations that even present citizens do not experience. Of course growth will slow and discord will increase just based on demographic change, and no access to real income that can sustain a reasonable existence within dis-integrating societies.

The Euro is more of only a tidbit, not the essential cause of any economic problems in the European Union, in their bucket of current events. How far will the scenario go to reach real chaos? It looks like the political leadership of all sides really want to find out.

The game is pretty old and hasn't really changed much. Different players just change seats.

Why is Germany's position so obdurate? Banks! Bankrupt small German banks, crucial to the German Mittelstand. Those bankrupt banks finance the crucial middle size German companies which serve the giant German exporters with parts. That bankrupt system is a disguised way to subsidize German industry, under the radar of the European Commission. It explains why Germany has resisted French efforts to create a banking union extending to all banks (Germany consent to only strongly regulate big banks; since 2008, France has only big banks...)

So how to fix the situation? Well, first, cognition! Inform all the deciders, and the public why and how Germany is acting so selfishly. Thus, deepens the debate. In all matters, the way to progress is to have the real debate about the real issues, below the red herrings. As long as the real motivations of Germany are not exposed, Germany feels that there is no problem, just how much the others can take...

While the US and the UK were mired in political chaos during 2017 the EU claimed it was experiencing improved economic conditions. It appears this did little to move Europe in the direction of implementing long-needed EU and eurozone reforms.

Until the EU is prepared to do “whatever is necessary,” to paraphrase ECB chief Mario Draghi, in order to protect retail bank depositors, the EU will remain far from being a united political economy. More on this subject in the article below.

I know that there are many issues that come under economics. Trouble is, there is both an "old world" economy, and a "new world" economy. In the old world economy all the richest people are doing well so why would they want anything to change? And in the new world economy, which is on the cusp of becoming really large, the inhabitants don't even think about the economy per.se.So look at what Italy spends on education or health care or infrastructure, and it is weak because the rich don't actually pay their taxes (and I have to simplify, so don't jump to the conclusion that nobody pays their taxes). This means that they are not getting a proportional share of the new world, which depends on education and health care and infrastructure spending. And unlike the USA, they don't have outsiders falling over themselves to go to Silicon Valley.The people who are ultimately hurt by this (disproportionally) are the young. Who in every society are really powerless (except for the Tech World). This is not really just a Euro problem, and until Germany gets THAT fact, the problem will remain.

Excellent analysis, but Germany will never willingly abandon the undervaluation of its exports a fixed euro gives, as it pusues total financial domination. Could countries not re-establish their old currencies trading alongside the euro, to trade internally and to have fluctuating exchange rates? Restore financial freedom to adjust - like the UK? A more dynamic zloty for example? We are not actually as hog-tied as the ludicrous parliamentary socialists (e.g. in Greece) and Germany pretend.

Either the Eurozone will have to adopt a common fiscal policy to match it's common currency or the participant countries will have to reclaim their currency sovereignty. The Euro cannot continue to function when it effectively has different values in the different states. It doesn't make sense.Greece is hog-tied, that isn't pretence; socialist or otherwise. And I'm not convinced there are any socialists in the German parliament; possibly not amongst the electorate either.

The notion that the Euro is the modern version of the Gold Standard has been around for a while. Of course, the rigidity of the Gold Standard ultimately destroyed it. Politically, it was a gift to extremists everywhere. Eventually sanity set in and given that the choice was abandoning the Gold Standard or having the world ruled by Communists and Nazis, elites recognized that the Gold Standard had to go.

What is really sad is that the same social forces that promoted the Gold Standard are now obsessed with upholding the Euro. The Gold Standard was the Idée Fixe of cosmopolitan elites at the time. The same folks now declare their undying faith in the Euro.

I appreciate that this is rather obscure. However, the sad life and death of Junnosuke Inoue provides a model for the fall of Europe. Junnosuke Inoue was a great liberal of the period (Japan in the 1920s-1930s). He favored democracy, rejected extreme nationalism, and opposed war. He also put Japan back on the gold standard, triggering a downturn that cost him his life and put Japan on the road to Pearl Harbor and Hiroshima.

Gold also has its advantages because it holds its value as well as, or better than, other real assets. When Nixon took the $US off the gold standard in 1971 a dollar would buy a couple of good TV dinners. Now you'll get an ice lolly or some such. So long-run dollar-holders have lost massive real buying power. But as you say, like the euro, this stability is maintained by massive internal deflation if you use gold for avery-day trading and hit a BoP deficit and gold outflow. So come off the gold-standard or euro of course. But gold (and perhaps silver) give ordinary people a way out the snare of bank-money savings, the virtual currency, fiat money etc. which banks, as our debtors, hold on account and we use for payments, savings etc all at a charge to them: money placed in a bank is only a debt the bank owes and can rescind. . From $32 to the gold troy ounce you can now get roughly $1000, you have a savings vehicle; to be safe you must take physical possession of the gold, and if necessary conceal it from the authorities in times of stress. Coming off the gold standard makes holding gold (and silver) more attractive, not less for the man in the street who can't afford land and high-end paintings and the like. We might say gold is the poor man's friend, banks and Central Banks not.

The Euro is trapped in a straight jacket. Take the value of the Euro. On the 30th of March 2018, the Sterling pound value to the US dollar was £1 equal to US$1.404. The Euro value against the Sterling pound was £1 was equal to €1.140 while against the US dollar it stood at US$1 to €0.81169. By dividing €1.140 by €0.81169 it gives the cross rates of 1.404. Then look at North Korea. When looking at the North Korean Won its Sterling pound value stood on the same day at KPW1,263 while its US dollar value at KPW900.69 giving a cross rate of 1.403. Does North Korea have the same level of trade and currency liquidity es within their money markets as the EU with the US and UK to give such IMF cross rates? The same arguements go between EU countries. The reality is Italy, Germany, Spain etc all have different levels of trade not to reflect one single value. The reality is that the EU worked better in the pre-approval Euro era with each country having its own national currency reflecting trade between EU nations while the Euro was meant to deal externally with the US dollar as a reserve and global trade currency. The Euro is meant to be used externally and internally EU nations are meant to use their own national currencies. The reality of having one value, one currency is seen in the IMF fixed cross rates. The reality of a free market is that the IMF fixed cross rates need to be replaced with Free Floating Cross Rates against which the value of the US dollar would vary between markets based on actual trade in commodities and currency arbitrage would help equalise quotations between markets. With the current one value across EU states then as seen in the IMF fixed cross rates North Korea is equal to the EU, while in the EU Spain is equal to German under the Euro value system. This is far from the truth on the ground.

The Euro is first and foremost geopolitical design to ensure that this bag of wildcats will not engage ever again in internecine warfare as it did since the region's origins. Second,a split in the Eurozone will play to Russia's advantage and that doesn't sit well for neither US nor Germany and Poland least of all. Geopolitics determines all the rest. Italy must do its part to ensure it stays competitive . This requires making irs labor laws more flexible so to make its corporations more flexible. Tax laws and entitlements should be overhauled in order to ensure the long term sustainibility of the government's finances. All this gas to be done within the Eurozone and even moreso if Italy for once hypothetically decides to leave the monetary zone . Otherwise how can it hope to grow enough to service its public debt, without empiverishing its population with depreciations and liquefying most of its purcasing power as a great percentage of it is owed to its citizens. There is no easy cure to Europe's malaises but surely enough Italy has to evolve into a more lean economy or it will keep sinking. Its young will keep emigrating and no one except Germany will be left to pick up the social security tab.

It's simple....Turkey is becoming more and more destabilized....the majority of EU populace becoming far less tolerable with Merkel and her open door policies welcoming those arriving across borders undocumented and who few know anything about....

With the arrival of Karl Guttenberg who will take the baton from Merkel and German nationalism on the rise, the "Brutes of Tehran" should be looking over their shoulder to Germany who has been befriending allies and supplying weapons throughout the Middle East in its strategy to challenge Tehran....and Tehran failing to see the future clearly focused so at our strong and determined President Trump here in the States.

The economy and overall attitude on Main Street USA is quite confident versus the tainted media outlets like CNN and other whose agenda resulted in the fortunate election of President Donald J. Trump versus the evidently corrupt and criminal mannerisms of good 'ol Ms. Hillary and Billy Boy and their me-me selfie, the Clinton Foundation and pals like Soros and a DNC so willing to support self-agenda versus the good of the American people who work tirelessly and have no time any longer to tolerate the politicizing compromising Main Street USA.

For the European, understand that Germany will downsize the EU. This is inevitable. Recall 1938 and the lessons learned by failing to see reality and repenting and understanding that God and his Son, Jesus Christ afforded us the real handbook to follow and like Adam and Eve, corruption abounds and as a result, to the continued demise of humanity as Germany leads Europe to confrontation w Tehran.

So read your Bible and take a good look at the words of the Gospel and repent!

*Thank you President Donald J. Trump for your 24x7 commitment toour nation and for your foresight and opening discussion w/Korea with the assistance of the Chinese whose intent is of course to introduce its owncurrency for the Pacific Rim as Europe falters plagued by Uncle Vladimir'snext moves which will surprise many....

This is an excellent article. Subsidiarity is perhaps the most ignored part of the founding principles of the EU. http://letthemconfectsweeterlies.blogspot.com/2018/06/the-orange-one-mayhem-oh-great.html

What is constantly ignored in the discussion of the Eurozone is that there are two sides to the management of a currency.

A sovereign currency like the Euro can control monetary policy within it's operational area, and as we've seen since 2008 pump money into the economy at will, but without the fiscal union to match the job's knackered.

A common currency area has to have common tax policy or it will tear itself apart. It is doing. Slowly....but surely. There is no alternative to this because the social pressures will create the break. Politics trumps economics every time. Especially when the economic model doesn't work and is built on elaborate fictions.

The first thing that is needed is that the EU gives up its requirement that all new members ultimately join the euro. It would be the final recognition that there are disadvantages too to a common currency.

Next step would be to make it easier to leave the eurozone. My ideal would be a smaller zone with Germany as a core.

I don't believe in tighter integration. It is not just German tax payers not wanting to pay for "lazy" South Europeans. The problems the other way around are at least as big: a German bank with problems has a much better chance of being saved than a Greek bank in exactly the same position.

Hear Hear ! Prof Stiglitz. A little sanity piercing the "Commission Speak" from the brilliant EU leaders ! As anyone who worked in Italy in the "time before the Euro" can testify, this was a period of growth and profits for industry. The banks more or less played their role, but it was exporting industry which drove the country forward. Of course this was before "competent Government" was established, to more effectively truss up industry and commerce, and indeed the public, into paying taxes. It was before the introduction of the obligatory "recevuto fiscal" in the restaurants and hairdressers, and during the time when the Government sector was poor, and had limited scope for spending, constrained by resources and expensive borrowing.

The Euro, the cheap and easy borrowing, and the imposition of low inflation put paid to the Italian Miracle. Initially industry benefited from cheaper money, but when this had to be paid back without inflationary discount the game came to an end... and growth vanished as Italian firms were priced out of the markets they had dominated. All one can say now is that reality cannot be forever ignored, and that the Italians will "work around" the mess they created by accepting the Euro, and the Lisbon treaty which has done so much harm! Viva Italia !

Mr. Stiglitz's sense of 'humanity' for Italy': leave the labor market restrictions as they are, leave the entitlement programs in place as they are, leave the tax and tax collection system as it is, leave the public sector (la casta) in place as it is, leave the court system as it is - just borrow more, and more, to stay afloat. Increasing public debt will trigger private sector investments, create productive jobs and future prosperity. To me it sounds like Mr. Stiglitz in Lala-land, which by definition, is very humane.

Why isn't a US citizen asking "can the dollar be saved?" Pointing to the harm done to places like West Virginia, Kansas, etc who have austerity forced on them by the coastal elites with highly productive economies producing stuff that the people of depressed States must buy, the garden products from California, the Internet services from California, the mail order from Seattle, etc.

Appalachia should exit the dollar zone and issue a "lump of coal" promisory note, nicknamed "the clinker". Then West Virginia can improve the lives of its citizens by printing and handing out a thousand clunkers a month to each of them to establish a minimum income. Then they will be able to buy whatever they want.

As long as it's produced in West Virginia, meaning no orders from Amazon, no Internet, no garden produce from California.

How will Italians and Spaniards be better off when their money can't by cars from Germany or oil from the Mideast?

And without the moral suasion of California media, expect an Appalachian explosion of recessive genetic conditions and malformations which the resurgent snake-handling 'New Confederates' will tout as a return to 'family values' and point to the regions' entrepreneurial innovation in the biosciences.

"How will Italians and Spaniards be better off when their money can't by cars from Germany or oil from the Mideast?" Two ways at least. First, they will have a competitive currency to facilitate exports. Second, they won't be subject to the enforced austerity/Open Borders follies of the European North.

Joseph E. Stiglitz asks if the euro can be “saved,” because Italy has installed a coalition government of two populist parties that would ultimately exacerbate its budget deficit. The anti-immigrant League from northern Italy proposed a flat tax, that would benefit the rich, and the populist Five-Star Movement (M5S) with its base in the South, advocates a universal basic income (UBI) – an agenda Italy can ill afford, given its debt woes (132% to GDP). Despite earlier pledge to ditch the euro, the two parties have dropped the idea of leaving the eurozone. The author says: “Across the eurozone, political leaders are entering a state of paralysis: citizens want to remain in the EU, but they also want an end to austerity and the return of prosperity. So long as Germany tells them they can’t have both, there can be only one outcome: more pain, more suffering, more unemployment, and even slower growth.” Only the periphery of the eurozone – also known as the PIIGS, an acronym for five of the most economically weak eurozone countries during the 2008 financial crisis: Portugal, Italy, Ireland, Greece and Spain - that is struggling. Meanwhile Ireland and Spain had recovered from their long economic nightmare. Germany is the richest country in Europe and has profited greatly from the euro. But German taxpayers are reluctant to bail out other struggling countries in the eurozone. They resent Germany and reject its austerity measures. The author can not blame the euro for Italy “performing poorly since the euro’s launch.” The country has a productivity problem - between 1995 and 2016 it grew 0.3 percent a year, compared with 2 percent for Germany. The economy is still smaller than it was in 2008 - with unemployment at 11.6%. Labour market participation is low, and its birthrate in 2014 was the lowest since the foundation of the modern Italian state in 1861. Sclerotic labor markets, corruption, nepotism and abundance of red tape do not seem to be the central problem. Critics say the major obstacle to growth is Italy's manufacturing sector, which has traditionally been dominated by small businesses, many of which in family hands. They have been reluctant to invest in human resources and slow to innovate, like taking advantage of new labour-saving technologies, such as computers in the 1990s to boost productivity. The goods and services they produce are more expensive than those of their rivals. Specialising in low-cost manufactured products they face fierce competition from China which dominated the segment of the global economy since it joined the World Trade Organisation in 2001. The lack of competitiveness means that Italy had suffered the biggest drop in export market share of any developed country. Morever it has tended to have higher costs and higher inflation than rival countries since World War II. Up until Italy joined the euro, it had been able able to restore competitiveness by devaluing the lire, which made exports cheaper. This option is no longer on the table. Instead the country is forced to try and drive down prices and wages domestically to increase productivity, in a process known as internal devaluation. Matteo Renzi had tried a different approach: structural reforms of Italy’s labour market. But it had proved unpopular, leading to his resignation after a defeat in a referendum on constitutional changes that aimed to make Italy more stable and to adopt tough-but-needed economic and labour policies.The Eurozone is often compared to the gold standard before World War II - a commitment by participating countries to fix the prices of their domestic currencies in relation to a specified amount of gold. In effect, the countries in the Eurozone no longer have an independent monetary policy, interest rates cannot be set in the pure national interest and exchange rates between countries are so fixed that they have actually ceased to exist. In the 1920s and 30s that proved to be a recipe for disaster, one which had been replayed decades later in the periphery of the Eurozone – the PIIGS.Joining the single currency was made easy in the 1990s. As one of the original signatories of the treaty of Rome, Italy desperately wanted to be in the first wave in 1999. But there was no real monitoring whether a country like Italy – with its inflationary tendencies – could actually cope with the rigours of euro-membership. Greece was only admitted in 2001 after cheating its way in. When it became clear that Italy would not meet the criteria, the rules were bent to make sure it did. The price it paid are two lost economic decades in which living standards have stagnated, which is why Italy has given up on mainstream politics. The author says Germany and other countries in northern Europe “can save the euro by showing more humanity and more flexibility.” But, he fears it will not happen and is “not counting on them to change the plot.” This north/south divide is nothing new, even within Italy itself. It remains to be seen how long the coalition between the League and the M5S will last.

"....It remains to be seen how long the coalition between the League and the M5S will last....."

...........and how much fallout there is when it breaks. There is no collective political will across Europe to address the problems so we'll just watch. And we'll all pretend it's the Italians own fault. A bit like the Greeks, but more expensive.

Will there be enough cash to bail out Italy in order to keep the European and global banks afloat again. That is the only question that is being considered.

Italy's Total productity growth, previously higher than Germany and France, hit a wall in 1995 and turned negative after joining the euro. Like Greece, its decline began before the crash. Investment was very high, yet TPF was negative! How does that happen? Active misallocation of resources is the answer. If Investment funds had been distributed at random TPF in manufacturing would have been 5.7 per cent higher! In other words, employing monkeys rather than managers would have improved outcomes! It's no good blaming everything on Labour market rigidities- like paying laid off workers 80 percent of their wage while their employer is restructures- because this has been declining. Bad management is at fault. Add in corruption and the well known problems of their financial sector- which means small firms with big potential are starved of resources- and we can see why the money Italy borrowed had a negative impact on its economy.

How will Italy benefit if Germany relates? Good managers and smart young people will have more, not less, incentive to leave for high salaries and bonuses in booming Berlin or Bonn or wherever. Is Italy supposed to compete with Bulgaria on the basis of low wages to attract factories priced out of Poland?

I suppose one could argue that if Italy devalues then cheap enterprises will be snapped up by the Chinese. But would that really restore Italian prosperity? Chances are, migrants will take the thankless low paid jobs.

The new Government may embrace pragmatic 'supply side' policies. I assume it has a mandate to take a machete to the corrupt bureaucracy which causes Italy to score so low on ease of doing business. It will also enforce a haricut on savers in some disguised form. It is unlikely to repeat the mistake of the Greeks. There is no point pretending everything is Germany's fault. Countries decline or rise because of investment and savings decisions made within their own borders. German relation would only benefit countries which have made and are making sensible decisions and thus have high factor productivity growth. But, as they do so, they gain scale and scope economies and penetrate low TFP growth countries.Italy has wasted the last six years. Presumably, it is ready and willing to take radical action to reverse this trend. This can't be done by repeating old hat like this article.

Hard to answer so much there are errors. Believing that Italy's problems would be solved in particular with an exit from the Euro is to misunderstand the reality of Italian society. To leave the Euro for Italy is an important and immediate devaluation that will come true. A major distrust and the impossibility of financing in international markets, interest rates rising sharply so a guaranteed recession. It is not a devaluation that will improve the economy.But a stranded society that should ask questions when it sees its young people go abroad. The Euro is just a scapegoat.

Germany needs to understand that in order to rule one has to respect the participants. In this case it is the very different nations part of the union. No short cuts of one size fits all is or can be a solution. Respect the difference and align yourself to share your wealth with the ones in your family.

Austerity was imposed mainly in the aftermath of left wing governments, now lets see what the EU is going to do with fellow populists.

I think only Mario Draghi has the capital to push for reforms of the Euro, and end some of the non-sense that has been spreading in Europe, hat we can have a community without solidarity.

For this we must be clear about our common ground, what Europe stands for, and kicking some countries out, like Hungary, Poland and eventually Italy if they go down the populist, xenophobic, authoritarian path, would be a good start.

Open Borders are ordained by God and any country that refuses to embrace Open Borders must be expelled from Europe. Let's start with Germany. Germany pays Turkey to keep illegals out of Germany so that Germany can pretend to have Open Borders and still maintain some domestic sanity. Of course, Austria, Hungary, Poland, Denmark, Italy, etc. have to go. Maybe we can keep Luxembourg.

If you want to punish you should punish Britain, France and the Netherlands for their part in supporting the Syrian uprising - a clear violation of international law and the ultimate cause of the refugee stream.

I guess I should have made he <sarcasm></sarcasm> tags explicit. However, the proponents of Open Border believe that they are defending the "one true faith". <sarcasm>I guess the war in Syria must be responsible for the floor or African migrants</sarcasm>.

After "...by 2016 it was 26% larger", shouldn't there be a sentence like "Had there not been a euro, the American economy would have only been xx% larger" in order for this to be an argument against the euro?

THE INFALLIBILITY OF POLITBUROAs usual, the Nobel Laureate hits the nail on its head.Infallibility of the Brussels Politburo however has made the mind blind.In such a conundrum, the European Union cannot see.Until DDay happens, when The Anglosphere Twins will be blamed.Instead of contemplating punishments for The Anglosphere Twins.Both Brexit & Trump confrontations should not have happened.Like the USSR, the EUSSR will mend when Italy crumbles like Greece.Unfortunately the Infallibility of The Politburo behaves similarly.Sad. True. Centennial Meltdowns in Europe never learn from history.

Thanks Peter.The Infallibility of The Politburo produces similar behaviour in USSR or EUSSR.Excommunication by The Politburo - can only be ended by The Zero option.The Zero - like The Truth - cannot be excommunicated.The Zero is the Twin of Infinity - the road to Infinity begins at Zero.The First Brexit - 500 years ago - resulted in The Anglosphere, 2 billion strong.With China joining The Anglosphere, The Second Brexit will be 4 billion soon.The Anglosphere is The Zero - The Truth that The EUSSR cannot crush.Like The Decimal System that replaced The Roman Numerals.

Both Europe and the United States are experiencing the unpleasant consequences of philosophies and policies that have broken open the financial system a number of times since 2007.

When we look back to the period between 1929 and 1945, the causality and structural changes made in reaction are obvious. Yet while living within a similar mess, each player will simply take self-protective actions without trying to correct the basic problem. And data on profit and income show that the chaotic decade since 2008 has been very good for some financial investors.

Stiglitz has shown himself as a person who looks beyond partial 'fixes' to actual solutions based in human need, but I think in this case he is not adequately questioning assumptions. Think of what information technology is making possible to create flexible unity that allows great diversity. However, a financial system actually designed to meet economic needs might not support the constant gaming of the secondary market players who have done so well since 2008.

Governments should decide whether the financial system exists for the economy or vice versa. The underlying philosophical question would be to decide whether predators really are purveyors of truth - does the inability of the Greek or Italian buffalo to outrun a City lion really mean that the buffalo population must necessarily be adjusted? Or is that a story made up for the benefit of the City lions?

Very good article from the author, PS we need more of the same. Two points: (1) Germany and the Northern European countries could not care less about the other EU countries, they care only about themselves because they are sitting on a demographic time ticking bomb and as such they need all and any of the resources they can put their hands on in order to maintain their standard of living for the long run, even if this means the slow death of the population of the other EU member states (and possibly theirs eventually); (2) the Euro is a rigid mechanism that was developed for a specific purpose for a different era and is now obsolete and is no longer fit for purpose. In order to correct the mistakes of the last decade or so and to gradually move away from the austerity non sense, any European currency (whether existing or new) must be lenient enough and must function parallel to the currencies of each member state (once reinstated), and as such, the risk shall remain at the level of the member states who's incentive shall be to create good quality jobs and increase productivity. Their sovereign currencies would then fluctuate according to their performance but monitored and calibrated by the European Central Bank and not by the mood of the politicians or finance ministers of a handful of EU member or other states. Regarding the excessive debts that have been artificially created since the year 2000, when the euro was first introduced, these must be isolated from any new system or mechanism and dealt with gradually in accordance with the market and geopolitical conditions. A banking union or a common deposit insurance scheme will no longer be necessary.

Eurozone cannot by saved for one simply reason, whatever eurozone does it fuels populism. Currently, with eurozone policies favoring North, it fuels populism in South. Should eurozone policies change, to favour South, it would fuel populists in North. So the outcome is always the same, populists eventually tear eurozone apart. The only question is, what kind of populists, northern or southern.

And by the way, it´ s rather unfair to blame populists, since eurozone was created by mainstream parties and it was created with flaws that make it unworkable and unsustainable. Rise of populists is only a reaction on failures of mainstream parties.

The comments on this should vastly entertaining if only because the EU, Eurozone, and the Euro are basically a religion thus the faith must not be questioned. In way too many discussions of not just the EU, and the EURO, but of Globalization and free Trade in general Theories are taken has fact not to be questioned. But of how it's working for regular people is considered heresy, Questioning "Free Trade" "Globalization, "Unending Immigration from the 3rd world automatically gets you branded a mouth breathing retard, without looking act the facts on the ground, or studying how it is actually working for the average person. And theories that cannot be questioned are religion not science. Mr Stiglitz verges on heresy in this article the reactions should be ..........interesting.

But I will say 2 things:

1.) The Euro can't be saved the only people who could implement reforms won't if only because to do so would be to question the faith and that is not permitted.

2.) The crisis in Italy, Brexit, and Trump, are merely harbingers the beginning not the end of the backlash. For the people who could change the trajectory of things won't because to do so is to act against the faith and their own interests. A system by our elites in the developed world. A system that benefits them quit well. A system personified in this case by the EURO, but it's a general problem. But is disadvantaging and destroying the lives the middle and working class. And they hate it, and bear in mind they hate it so badly they are willingly and knowingly destroying it even though destroying it isn't going to make things a hair better for themselves. Witness Trump, Brexit, Italy the rise of Strong Men in general.

Although I do have question for elites who read this: How can you straight faced call the current system a success when a plurality headed to a majority want to destroy it irregardless of the cost to themselves?

SE, I have read long histories of how the Protestant Reformation occurred. Plenty of highly influential people in the Catholic church knew of the dire problems in the church. They knew that unless major reforms were undertaken immediately, the church would be ruptured. They had practical plans for reforming the church.

They tried to reform the church and failed. The power of the status quo was too great. Inevitably, a Luther arose to bring down (in part) the system. People never learn. After the final crash, the postmortems will include references to folks like Stiglitz who tried to fix the system. Forlorn references of course.

All true except for one thing. Europe wide deposit insurance amounts to a German guarantee of NPLs (Non-Performing Loans) everywhere. Germany will never agree to this (and rightly so). If all European banks were tightly regulated to the same standards, European deposit insurance might work. However, that would (de facto) mean a ban on bank loans to governments. Imagine how that would go over in Europe.

The Euro can be saved (whether it should be saved is another matter). However, saving the Euro means implementing a gigantic transfer union (trillions of Euros per year and paid for by Germany), Eurobonds (by the trillions and paid for by Germany), and high Euro inflation (5% would be a good initial target). Of course, this is exactly what Germany doesn't want. Germany needs to either embrace the reforms needed to save the Euro or end it.

If Germany was being nifty, it would quit the Euro and revert to the Mark, hoping to take with it the spoils it has extracted already from the rest of the union, and pretending it was all theirs by right.